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DECREE No

DECREE No. 192-CP ISSUED ON THE 28TH OF DECEMBER 1994 PROMULGATING THE REGULATION ON INDUSTRIAL PARKS

THE GOVERNMENT

Pursuant to the Law o n Organization of the Government on the 30th of September 1992;

Pursuant to the Law on Promotion of Domestic Investment on the 22nd of June 1994;

Pursuant to the Corporate Law adopted on the 21st of December, 1990, and amended by the Law on Amendments to A Number of Articles of the Corporate Law adopted on the 22nd of June, 1994;

Pursuant to the Law on Private Business adopted on the 21st of December 1990, and amended by the Law on Amendments to A Number of Articles of the Law on Private Business adopted on the 22nd of June 1994;

Pursuant to the Law on Foreign Investment in Vietnam promulgated on the 29th of December, 1987, and amended and supplemented by the Law on Amendments to A Number of Articles of the Law on Foreign Investment in Vietnam on the 30th of June 1990; and by the Law on Amendments to A Number of Article of the Law on Foreign Investment on the 23rd of December 1992 (hereafter referred to as the Law on Foreign Investment);

With a view to creating favorable conditions for Vietnamese and foreign organizations and individuals to invest in Industrial Parks;

At the proposals of the Minister-Chairman of the State Committee for Cooperation and Investment, and the Minister of Justice,

DECREES:

Article 1.-To issue together with this Decree the Regulation on Industrial Park.

Article 2.-This Decree takes effect as from the 1st of January 1995.

Article 3.-The Minister, the Heads of agencies at ministerial level and the Heads of agencies attached to the Government are responsible for providing detailed guidance for the implementation of the Regulation issued together with this Decree.

Article 4.-The Ministers, the Heads of agencies at ministerial level and the Heads of agencies attached to the Government, the Presidents of the People's Committees of provinces and cities directly under the Central Government, and the Heads of the Central Offices of the People's Organizations are responsible for implementing this Decree.

On behalf of the Government

Prime Minister

VO VAN KIET

REGULATION ON INDUSTRIAL PARKS

(Issued together with Decree No 192-CP on the 28th of December 1994 of the Government)

Chapter I

GENERAL PROVISIONS

Article 1.- The Vietnamese Government welcomes and encourages organizations and individuals at home and abroad to invest in Industrial Parks on the basis of this Regulation and the provisions of Vietnamese law.

Article 2.- An Industrial Park provided for in this Regulation is a concentrated industrial area established by decision of the Government. It has its defined geographical area, is specialized in industrial production and provides services in support of industrial production. It has no inhabitant.

Article 3.-

1) In an Industrial Park, there are businesses of the following categories:

a) Vietnamese businesses of all economic sectors.

b) Enterprises with foreign investment.

2) In an Industrial Park, there may be export processing zones and export processing enterprises.

Article 4.- In an Industrial Park, investors are allowed to invest in:

1) Construction of and business in infrastructure works;

2) Manufacturing, sub-contracting the manufacture and assembling of industrial products for export and consumption on the home market.

3) Services in support of industrial production.

Chapter II

ENTERPRISES IN AN INDUSTRIAL PARK

Article 5.- Enterprises in an Industrial Park are business and factories stipulated in Article 3 of this Regulation, which are established and operated in accordance with the provisions of law for each business category.

Article 6.- The Industrial Park Enterprise has the rights:

1) To lease land in the Industrial Park for the construction of workshops and architectural structures in support of production and business;

2) To use, and pay for the use of, the infrastructure projects, public utilities and facilities and services in the Industrial Park;

3) To organize production and business activities in accordance with the licensee, contract and enterprise statute;

4) To make direct export and import in accordance with the provisions of law;

5) To rent public utilities, transport means and services from outside the Industrial Park.

Article 7.- The Industrial Park Enterprise has the following duties:

1) To observe law, the Regulation on Industrial Park, the Regulation of the Industrial Park and the License;

2) To register with the Managerial Board of the Industrial Park of the volume of products for export and for consumption on the home market;

3) To discharge financial obligations toward the Vietnamese State;

4) To open account at a bank on Vietnamese territory;

5) To effect the accounting and statistic regimes provided for by Vietnamese law;

6) To buy property insurance and other insurances provided for by Vietnamese law;

7) To effect measures to ensure labor safety, industrial hygiene, environmental cleanness and to prevent fire and explosion.

8) To implement provisions on security and public order in the Industrial Park.

Chapter III

CONSTRUCTION OF AND BUSINESS IN INFRASTRUCTURE WORKS IN INDUSTRIAL PARK

Article 8.- The Vietnamese Government encourages and creates favorable conditions for companies at home and abroad specialized in building and business of infrastructural works in Industrial Parks (Infrastructure Development Company, for short) to be established and operated in accordance with the provisions of law.

Article 9.-

1) The Infrastructure Development Company has the rights:

a) To engage in mobilizing investments in the Industrial Park on the basis of the approved development plan;

b) To sub-lease land plots already built with infrastructure works to enterprises stipulated in Article 3 of this Regulation; to rent or sell workshops built by it in the Industrial Park;

c) To do business in services in the Industrial Park in compliance with the provisions of the license and company statute;

d) To set the prices for land lease, rent or sale of workshops and services, with the approval of the managerial Board of the Industrial Park;

2) The Infrastructure Development Company has the duties;

a) To build infrastructure works in the Industrial Park in compliance with the approved plan, design and time schedule. If the Company cannot complete the construction as planned, due to a force majeure or other justifiable reasons, it must, in 30 (thirty) days at the latest before the expiration of the construction-time limit, request the competent State authority to extend the time limit. If the time limit expires and the Company has not requested an extension or has not been granted an extension, the unused land plot shall be recovered;

b) To maintain and repair infrastructure works in the Industrial Park throughout the operational period of the Company;

c) To ensure industrial, ecological and environmental hygiene in areas under the responsibility of the Company in the Industrial Park.

Article 10.- The construction of buildings and workshops in the Industrial Park must comply with the procedures and regulations on construction, labor safety, fire and explosion prevention, and ecological and environmental hygiene.

Article 11.- In case the construction of buildings and workshops requires a phasing of the land use, the Industrial P ark enterprise is still allowed to lease at one time the entire necessary land area. However, it must have a phased plan to use fully the leased area within a maximal period of 2 (two) years. In the event of a force majeure or any other justifiable reasons for which the enterprise cannot fulfill its committee land-use plan, the enterprise must, in 30 (thirty) days at the latest before the expiration of the time limit, request a time limit extension. If the time limit has expired or the enterprise is not granted an extension, the used part of the land plot shall be recovered.

Chapter IV

LABOR RELATIONS IN INDUSTRIAL PARK ENTERPRISE

Article 12.- The labor relations in the Industrial Park Enterprise age governed by the Labor Code of Vietnam on the 23rd of June 1994, and the other related legal documents.

Article 13.- Vietnamese laborers who are employed by the Industrial Park Enterprise must be registered with the Managerial Board of the Industrial Park.

Article 14.- The Industrial Park Enterprise shall give priority to employing Vietnamese laborers, first of all the laborers in the area where the Park is located. With regard to jobs of which Vietnamese laborers are not yet capable, the enterprise is allowed to employ foreign laborers for accretion period of time during which the enterprise shall train Vietnamese laborers to do the jobs in replacement of the foreign laborers.

Chapter V

MANAGEMENT OF FINANCE AND FOREIGN EXCHANGE

Article 15.- The tax duty of the Industrial Park Enterprise:

1) Vietnamese businesses of all economic sectors shall discharge their tax duty at preferential levels as stipulated by existing regulations.

2) Foreign-invested enterprises and their foreign partners shall pay their taxes as follows:

a) Profit tax at:

- 18% of the gained profit for manufacturing units; and 12% of the gained profit for units which export at least 80% of the gained profit for units which export at l east 80% of their products. The enterprise shall be exempted from profit tax for two years from the date it becomes profitable;

- 22% of the gained profit for service units. The enterprise shall be exempted from profit tax for one year from the date it becomes profitable;

b) To pay the other taxes as stipulated by regulations existing at the time of annual tax payment.

3) The export-processing enterprises in the Industrial Park shall pay taxes according to the Regulation on Export Processing Zone issued together with Decree No. 322-HDBT of the 18th of October 1991, of the Council of Ministers (now the Government).

4) The Infrastructure Development Companies shall enjoy the preferential tax rates stipulated by the tax legislation.

Article 16.- Vietnamese banks join-venture banks between Vietnamese and foreign partners and branches of foreign banks in Vietnam have the right to operate in the Industrial Park after they have obtained permission from the Governor of the State Bank of Vietnam and consent from the Managerial Board of the Industrial Park.

Article 17.- The management of foreign exchange in the Industrial Park is carried out according to the provisions of the Vietnamese State.

Chapter VI

ORGANIZATION AND MANAGEMENT OF THE INDUSTRIAL PARK

Article 18.- The Industrial Park and its Managerial Board shall come under the State management of the ministries, agencies at ministerial level and agencies attached to the Government. Depending on the nature of each Industrial Park, the Prime Minister shall decide which State agency shall assume direct management of the Industrial Park.

Ministries, agencies at ministerial level and agencies attached to the Government shall empower the Managerial Broad of the Industrial Park to perform a number of State management duties within the Industrial Park.

Article 19.- The People's Committee of the province or city where the Industrial Park is located has the duties:

1) To perform State management functions of the Industrial Park in its territory. With regard to matters beyond its jurisdiction, it is to coordinate with the special State Committees and Ministries to solve them;

2) To take part in designing development plans for the Industrial Park;

3) To supervise and control the implementation of the provisions on labor safety, environmental hygiene, fire and explosion prevention and security and order maintenance in the Industrial Park;

4) To create favorable conditions for the Managerial Board to fully implement the duties stipulated in Article 20 of this Regulation.

Article 20.- The Managerial Board of the Industrial Park is the body directly managing the Industrial Park. It has the following tasks and functions:

1) To draft the development plan and the Regulation of the Industrial Park and submit them to the competent State agency for approval;

2) To mobilize investment in the Industrial Park;

3) To provide guidance for, and receive, applications for investment in the Industrial Park and send the application dossiers to the competent authorities for consideration for granting licenses.

4) To grant permits for construction on the basis of approved designs;

5) To control and supervise the implementation of investment licenses, business licenses, product contracts, service contracts and the observance of the legal provisions o n labor and wage;

6) To implement the provisions on security, safety and public orders within the Industrial Park;

7) To manage servicing activities within the Industrial Park;

8) To consider and approve land rent rates and service fees by the Infrastructure Development Company and the servicing companies;

9) To reconcile labor and economic disputes at the request of the concerned parties.

Article 21.- The Managerial Board is composed of a Director, a number of Deputy Directors and an assisting staff. It has its own seal.

The Director of the Managerial Board shall be appointed by the Prime Minister at the proposal of the Minister-Chairman of the Government Commission on Organization and Personnel.

The Deputy Directors shall be appointed by the President of the People's Committee of the province or city directly under the Central Government, at the proposal of the Director of the Managerial Board and with the consent o f the Minister-Chairman of the Government Commission on Organization and Personnel.

The assisting staff of the Managerial Board shall be decided by the Director after approval by the Government Commission on Organization and Personnel.

The assisting staff of the Managerial Board shall be decided by the Director after approval by the Government Commission on Organization and Personnel.

Article 22.- The Managerial Board is a budgetary unit of the State Budget. All budget remittances collected at the Industrial Park shall be contributed to the State budget. All expenses on the operation of the Managerial Board shall be financed by the State budget.

Article 23.- All criminal cases within the Industrial Park shall come under the jurisdiction of the Vietnamese Court.

All civil and economic disputes, one party to which is the Industrial Park, shall be settled in accordance with the provisions of Vietnamese law, except for cases where a separate rule applies.

Chapter VII

FINAL PROVISIONS

Article 24.- All other provisions related to the operation of the Industrial Park, which are not stipulated in this Regulation, shall be applied in accordance with the corresponding provisions of the Law on Foreign Investment in Vietnam, the Law on Promotion of Domestic Investment, the Corporate Law, the Law on Private Business, and other related legal documents.

Article 25.- This Regulation takes effect as from the 1st of January 1995. The export-Processing zones and the Industrial Parks which were established prior to the effective date of this Regulation and which have the need to be transformed into Industrial Parks covered by this Regulation shall be considered and decided by the Government on a case-by-case basis.

On behalf of the Government

Prime Minister

VO VAN KIET